Best Ways to Choose a Credit Card Processing Company
Below is a MRR and PLR article in category Business -> subcategory Other.
Best Ways to Choose a Credit Card Processing Company
Launching an online business involves several crucial decisions, one of which is selecting a credit card processor. This choice will impact how you manage customer payments and the overall functionality of your website. Two primary methods exist: using a true merchant account or opting for a third-party processor. Your decision can significantly influence your site's performance.
Understanding Your Options
True Merchant Credit Card Processors
A true merchant account is dedicated solely to your business. Typically obtained through a bank or sales agent, it gives you complete control and responsibility. You may need to arrange a separate payment gateway unless bundled in the offer.
A true merchant account connects directly with major card networks like MasterCard, Discover, and American Express. Compliance with their stringent rules is mandatory if you decide to accept these payments.
Third-Party Credit Card Processors
Third-party processors have their own merchant accounts and allow businesses to accept payments under their umbrella. They set the rules you must follow as you share their account.
Consider Third-Party Processors If:
- Your business isn't officially registered- You've faced blacklisting
- Your business or goods are high-risk
- You have poor or no credit history
- You handle a low volume of transactions
- You lack technical expertise for complex setups
Additional Considerations:
1. No higher rates for high-risk businesses
2. No credit checks required
3. Incompatible with separate gateways
4. Their name appears on customers’ statements
5. Deposit of funds may take up to a month
6. Non-negotiable rates
Benefits of a True Merchant Account
Reputable online merchants often prefer a true merchant account. The advantages include:
- Better Rates for High Volumes: Discount rates are generally more favorable.
- Direct Control: Full management of customer relations and account configurations.
- Professional Image: Your business name on customer statements and a seamless checkout process on your website project professionalism.
Application Process:
Expect a credit check and contractual obligations. Negotiable rates depend on risk factors, such as product type. You have the flexibility to choose a standalone gateway, with funds deposited within 1-3 days.
Cost Considerations
New businesses often face tight budgets and small margins, making cost a key factor. Compare true merchant accounts and third-party processors by examining:
- Setup Fee: Initial cost to establish the account
- Discount Rate: Percentage of sales taken by the processor
- Transaction Fee: Flat charge per transaction
- Monthly Fee: Charged to maintain the account
- Gateway Setup Fee: Cost for gateway installation
- Gateway Monthly Fee: Ongoing charge from the gateway provider
Understand your monthly transaction volume and average customer spending to make an informed choice. For instance, while PayPal and Verisign are both popular, they offer distinct services.
Conclusion
Both true merchant accounts and third-party processors have unique benefits and applications. Your business needs should guide your choice, weighing all factors, not just costs. Sometimes, additional fees enhance customer experience and improve your website's appeal. Take your time to explore and find the most cost-effective credit card processing solution for your business.
You can find the original non-AI version of this article here: Best Ways to Choose a Credit Card Processing Company.
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